Climate Risk Management Market Size and Share - Outlook Report, Forecast Trends and Growth Analysis (2025-2034)

The global climate risk management market size was valued at USD 2.41 Billion in 2024, driven by rising regulatory pressures, climate-related losses, and demand for resilient financial planning. Forecasts indicate a CAGR of 18.20% from 2025 to 2034, with the market anticipated to reach USD 12.83 Billion, fueled by stricter disclosure mandates, advanced risk modeling tools, and net-zero transition goals.

Global Climate Risk Management Market Report Summary

Description

Value

Base Year

USD Billion

2024

Historical Period

USD Billion

2018-2024

Forecast Period

USD Billion

2025-2034

Market Size 2024

USD Billion

2.41

Market Size 2034

USD Billion

12.83

CAGR 2018-2024

Percentage

XX%

CAGR 2025-2034

Percentage

18.20%

CAGR 2025-2034- Market by Region

Asia Pacific

20.4%

CAGR 2025-2034 - Market by Country

India

21.3%

CAGR 2025-2034 - Market by Country

China

20.1%

CAGR 2025-2034 - Market by Deployment Mode

Cloud-Based

23.1%

CAGR 2025-2034 - Market by End Use

Energy and Utilities

20.7%

Market Share by Country 2024

Japan

6.5%

Climate Risk Management Market Overview

Growing Impact of Climate Change Supporting the Market Growth

The global market for climate risk management is expanding rapidly as governments, financial institutions, and businesses seek tools to assess and mitigate the growing impact of climate change. With global focus shifting from disclosure to actionable adaptation, the demand for advanced climate intelligence platforms is surging, driving a sharp rise in the climate risk management market value. Supporting this trend, in September 2024, XDI launched the XDI Climate Risk Hub, an innovative platform enabling real-time, physical climate risk analysis across sectors and geographies. Originally developed with the Hong Kong Monetary Authority and now globally accessible, the XDI Climate Risk Hub features three risk rating bands, and a suite of financial risk metrics, for eleven climate hazards, four climate scenarios, five-year time steps for analysis through to 2100, and a spatial resolution of up to 5m x 5m, empowering informed decision-making in a changing climate.

Climate Risk Management Market Growth

Banks Prioritise Climate Risk in Investment Decisions

Climate risk management is becoming a strategic priority worldwide, with financial institutions, particularly in emerging markets, accelerating efforts to embed climate considerations into credit evaluation and investment frameworks. This shift is a key driver in the climate risk management industry, as tools like the one launched by WayCarbon on May 26, 2023, are gaining traction. Tailored for development banks in Latin America, the tool evaluates physical and transition risks, providing sector-specific climate scenario analysis. Backed by UK PACT and aligned with TCFD guidelines, it enables banks to assess climate risks in agriculture, energy, and infrastructure, supporting more resilient and sustainable economic growth in the region.

Key Trends and Recent Developments

The global climate risk management market outlook is being shaped by advancements in climate risk solutions, enhancements in disclosure frameworks, integration of supervisory guidance, and evolving strategies.

April 2025

The Center for Study of Science, Technology and Policy (CSTEP) and Puducherry Climate Change Cell (PCCC) launched the Climate Risk Assessment Tool (CRAT) in Puducherry. The tool assesses climate risks across sectors like agriculture, health, water, and urban infrastructure using the IPCC AR5 risk framework, supporting evidence-based, climate-resilient planning with dynamic visualisations and sector-specific insights.

February 2025

Bloomberg launched the MARS Climate module, expanding its multi-asset risk management suite. This tool helps investors assess climate change's financial impact on portfolios, offering insights into physical and transition risks. Powered by BloombergNEF’s transition risk assessment Tool, it supports climate scenario analysis and regulatory reporting, enhancing risk management for financial firms globally via the Bloomberg Terminal.

February 2024

Telefónica invested in Mitiga Solutions to enhance its climate risk strategy. Mitiga's EarthScan™ platform uses AI and advanced climate science to help businesses assess climate risks, ensuring compliance with EU regulations. This partnership supports Telefónica's goal of sustainable digitalisation, aligning with its broader Climate Action Plan for achieving net-zero emissions by 2040.

February 2024

EY partnered with Microsoft to launch the EY climate stress testing and scenario analysis solution. The platform, powered by Microsoft Azure, helps Canadian financial institutions assess transition risks, comply with climate regulations, and refine decarbonisation strategies. Combining AI, data analytics, and cloud technology, the solution aids in managing climate risks and supports the shift toward a low-carbon economy.

Advancements in Climate Risk Solutions

The climate risk management market is seeing significant innovation as companies develop more advanced tools to assess and mitigate the financial impacts of climate change. These developments are aimed at helping businesses better understand their exposure to both physical and transition risks, allowing for more informed decision-making and improved resilience. WTW’s launch of Climate Quantified™ in June 2024 exemplifies this progress, offering a sophisticated solution that quantifies climate risks in financial terms, helping businesses plan strategically and navigate future uncertainties.

Enhancements in Climate Risk Management Disclosures

The growing need for transparent, standardised climate-related disclosures is leading to a significant shift in climate risk management market dynamics and trends. Organisations are introducing clearer guidelines and reporting frameworks to align with global standards, enhancing their ability to assess and manage climate risks. In line with this shift, OSFI's update to Guideline B-15 on March 20, 2024, aligns with IFRS S2 Climate-related Disclosures, streamlining reporting requirements for financial institutions and promoting greater transparency in climate risk data.

Shaping the Future of Climate Risk Management

The growing demand for robust climate risk management solutions has led to significant innovations, fueling the climate risk management industry growth. In response, FIS has launched its climate risk financial modeller in June 2024, a new SaaS tool designed to help businesses across industries assess, reduce, and report climate-related risks. By integrating risk modelling with third-party climate data, this advanced tool supports proactive risk management and regulatory compliance, helping organisations better navigate the financial impacts of climate change.

Integration of Climate Risk Supervisory Guidance

The growth of the climate risk management market is accelerating due to rising awareness of climate-related financial risks and increasing regulatory pressure for transparency. In response to this expansion, the IAIS has launched a public consultation on climate risk supervisory guidance on 23 November 2023. This initiative, focusing on market conduct and scenario analysis, aims to standardise global approaches to climate risk in the insurance sector, ensuring financial stability and better consumer protection.

Climate Risk Management Market Trends

Growing Demand for Integrated Climate Risk Management Solutions

The climate risk management market expansion is fueled by the increasing need for businesses to comply with stringent global regulations and enhance their climate risk disclosures. A significant factor driving the market is the demand for integrated solutions that address physical climate risks and regulatory requirements. In January 2024, Persefoni and First Street formed a strategic partnership to embed First Street's physical climate risk data into Persefoni’s platform. This collaboration enables enterprises to access location-based risk data, streamlining compliance with regulations like the SEC’s climate disclosures and California’s SB 261, offering a more efficient approach to climate risk management and reporting.

Climate Risk Management Market Opportunities

Rising Demand for Climate Risk Tools in Global Finance

The accelerating focus on climate resilience in global finance is unlocking new opportunities, as institutions seek robust tools to identify and mitigate climate-related vulnerabilities. This growing demand is shaping the climate risk management market dynamics and trends, especially with the introduction of new regulatory and analytical frameworks. In January 2025, the Financial Stability Board (FSB) released an advanced analytical framework and toolkit designed to assess climate risks across borders and sectors. By incorporating forward-looking metrics, ranging from risk exposure to systemic impact, the toolkit equips financial institutions to trace and quantify the effects of physical and transition climate risks, reinforcing the global shift towards proactive climate risk oversight.

Climate Risk Management Market Restraints

• Limited access to high-quality, standardised climate data and inconsistent risk assessment methodologies hinders accurate climate risk modelling, slowing adoption across sectors.
• The integration of advanced climate risk tools requires significant financial and technical investment, making it difficult for smaller institutions to adopt and scale climate risk management solutions.

Climate Risk Management Industry Segmentation

“The EMR’s report titled “Global Climate Risk Management Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Breakup by Component

• Solutions
• Services

Breakup by Risk Type

• Climate change transition risks
• Physical Climate Risks

Breakup by Deployment Mode

• Cloud-Based
• On-Premises

Breakup by End Use

• Agriculture
• Manufacturing
• Energy and Utilities
• Real Estate and Infrastructure
• Transportation and Logistics
• Others

Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Climate Risk Management Market Share

Rising Demand for Digital Solutions Drives Climate Risk Management Adoption

According to climate risk management market analysis, the growing demand for tailored digital platforms is a key factor driving the adoption of solution components within the climate risk management space. Businesses increasingly require accessible, data-driven tools to assess and mitigate long-term climate threats. This trend is exemplified by Zurich’s launch of Climate Spotlight in November 2024. The solution combines a live self-serve dashboard with expert-led assessments, enabling analysis of climate risk exposure across global sites up to the year 2100. Its compliance with the CSRD and TCFD frameworks underscores the rising need for integrated, actionable climate intelligence in strategic planning.

The growing need for climate-resilient infrastructure is accelerating the demand for specialised services in the climate risk management market. As extreme weather events increase, service-based solutions offering tailored risk insights are becoming essential for long-term asset protection. This trend is reflected in DNV’s launch of a new hail risk assessment service in September 2024, developed in partnership with Jupiter Intelligence. Targeted at solar PV developers, the service delivers precise, location-specific hail risk projections up to 30 years ahead, enabling proactive planning and safeguarding clean energy investments, thereby driving industry growth.

Physical Climate Risks Dominates the Market

As per the climate risk management market report, rising physical climate risks such as floods, storms, and heatwaves are increasing the need for robust adaptation strategies. The UK’s Climate Adaptation Research and Innovation Framework, published in April 2025, outlines key sectoral priorities to strengthen resilience through targeted research and innovation. With a systems-based approach, the framework promotes collaboration across public and private sectors to prepare infrastructure, health systems, and the economy for projected climate impacts, ensuring readiness for both current and future risks.

The increasing focus on climate change transition risks is driving the climate risk management market growth. Banks and financial institutions are seeking comprehensive solutions to manage these risks, particularly in lending portfolios. This demand is exemplified by the launch of the CERM Sandbox by Green RWA and Finastra in June 2023. The platform enables banks to better understand and manage physical and transition climate risks within existing credit risk models. By integrating these risks into financial frameworks, the solution helps institutions enhance resilience and more accurately assess long-term, evolving climate-related financial exposures, contributing to the overall growth of the market.

Cloud-Based Solutions Driving Growth in Climate Risk Management

As per climate risk management industry analysis, the adoption of cloud-based deployment is a significant driver of market growth. Cloud solutions provide flexibility, scalability, and real-time data access, which are crucial for managing climate risks effectively. Oracle’s Climate Change Analytics Cloud Service, launched in April 2024, exemplifies this shift. The platform leverages AI and natural language processing to help financial institutions assess and manage emissions across global portfolios. By streamlining climate risk assessments and facilitating compliance with reporting standards, it enhances the ability to integrate climate risk into strategic decision-making, demonstrating the market's growing reliance on cloud technology.

The climate risk management market is growing rapidly as organisations strive to mitigate and adapt to the impacts of climate change. The rise of advanced platforms that integrate data, AI, and financial metrics is central to this shift. In September 2024, Howden launched its Resilience Laboratory platform, powered by Microsoft’s cloud services, marking a significant step in helping businesses model climate scenarios and assess financial risks. This platform, with its on-premises deployment mode, enables companies to securely manage climate risk data, evaluate the financial impacts of resilience investments, and make strategic decisions tailored to their operations.

Rising Climate Risk Management Trends in Real Estate and Infrastructure

The climate risk management market dynamics and trends are evolving as industries acknowledge the growing importance of climate-related risks. With an increasing number of extreme weather events and rising regulatory pressures, sectors like real estate and infrastructure are prioritising advanced climate risk management strategies. For instance, in March 2025, Wüest Partner collaborated with CLIMADA Technologies as real estate companies are leveraging data-driven tools to assess and mitigate climate risks. These shifting dynamics highlight a broader trend of businesses adopting proactive climate risk management to stay resilient in the face of environmental and regulatory changes.

The climate risk management market is experiencing significant growth as businesses increasingly focus on mitigating climate change risks. As industries face heightened climate challenges, especially in sectors like agriculture, proactive climate risk strategies are becoming essential. For instance, Syngenta Crop Protection’s partnership with Correntics in June 2024 leverages AI-powered climate risk analytics to strengthen supply chain resilience. By using data-driven tools, Syngenta can anticipate risks and optimise operational decision-making, ensuring continuity. The agriculture sector is driving market demand, with companies seeking effective, data-backed solutions to manage evolving climate-related risks.

Climate Risk Management Market Regional Analysis

CAGR 2025-2034 - Market by

Country

India

21.3%

China

20.1%

USA

19.5%

Germany

19.1%

France

18.4%

Canada

XX%

UK

XX%

Italy

17.7%

Japan

XX%

Australia

XX%

Mexico

XX%

Brazil

17.6%

Saudi Arabia

16.9%

Innovative Tools Drive Climate Risk Management Forward in North America

The climate risk management industry in North America is rapidly evolving as businesses face increasing pressure to adapt to extreme weather events and long-term climate change. With heightened regulatory expectations and a focus on operational resilience, organisations are seeking advanced tools to assess and mitigate climate threats. Supporting this shift, in October 2024, Everstream Analytics launched Climate Risk Scores, an industry-first solution designed to strengthen climate risk management. Integrated into its Explore platform, the tool uses IPCC data to quantify eight key climate indicators, such as drought, heat, and sea level rise, offering actionable insights for proactive supply chain protection.

Accelerating Climate Risk Management in Latin America Through Localized and Sustainable Solutions

The Latin America climate risk management market development is expected to accelerate as countries strengthen their approach to managing climate-induced threats across agriculture and infrastructure. With rising awareness and the need for locally adapted risk solutions, the region is moving towards long-term resilience models rooted in financial inclusion and sustainable planning. In September 2024, WRMS announced its expansion into key Latin American countries, including Brazil, Argentina, Colombia, and Peru, aiming to deliver parametric insurance, modelling tools, and financial risk mitigation services. By collaborating with local insurers, governments, and NGOs and aligning with ESG goals, WRMS is laying the groundwork for scalable, localised interventions that signal a transformative phase in Latin America’s climate risk management trajectory.

Competitive Landscape

The climate risk management market key players are focusing on innovative solutions, enhancing climate-related disclosures, integrating advanced risk modelling tools, and complying with evolving regulatory frameworks to drive sustainable growth and mitigate climate-related financial risks.

Acuity Knowledge Partners (UK) Limited

Founded in 2002 and headquartered in London, United Kingdom, Acuity Knowledge Partners is a leading provider of customised research, analytics, and technology solutions to the global financial services industry. It supports asset managers, investment banks, private equity firms, hedge funds, and consultants with offshore expertise, delivering high-value insights, business intelligence, and operational efficiency across financial and corporate sectors.

Moody’s Corporation

Founded in 1909 and headquartered in New York, United States, Moody’s Corporation offers data, intelligence, and analytical tools to support informed decision-making for business and financial leaders. It provides economic analysis software, credit ratings, and risk assessments, backed by skilled analysts, advanced technologies, and a global network of affiliates and joint ventures.

Baringa Partners LLP

Founded in 2000, with its headquarters in London, United Kingdom, Baringa Partners LLP is a management consultancy firm delivering services across the energy, financial services, and utilities sectors. Its offerings include energy advisory, asset optimisation, commodities trading, digital transformation, corporate banking, insurance, and retail consulting.

Bloomberg Finance L.P.

Founded in 1981, with its headquarters in New York, United States, Bloomberg Finance L.P. is a global provider of financial software, data, and media services. It offers advanced analytics, equity trading platforms, and real-time market data. Widely used by financial institutions, Bloomberg analysis across asset classes, including equities, fixed income, commodities, currencies, mutual funds, and ETFs, alongside comprehensive news coverage.

Other key players in the climate risk management market report include Dow Jones & Company, Inc., S&P Global Inc., Intercontinental Exchange, Inc., Institutional Shareholder Services Inc., KPMG AG, and Anthesis Group Ltd., among others.